II 

Calendar No. 140 

114TH CONGRESS 

1ST SESSION S. 1109 

[Report No. 114–76] 

To require adequate information regarding the tax treatment of payments 

under settlement agreements entered into by Federal agencies, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 28, 2015 

Ms. WARREN (for herself, Mr. LANKFORD, and Ms. BALDWIN) introduced the 

following bill; which was read twice and referred to the Committee on 

Homeland Security and Governmental Affairs 

JULY 7, 2015 

Reported by Mr. JOHNSON, without amendment 

A BILL 

To require adequate information regarding the tax treatment 

of payments under settlement agreements entered into 

by Federal agencies, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Truth in Settlements 

5 Act of 2015’’. 


srobinson on DSK5SPTVN1PROD with BILLS
2 

•S 1109 RS

1 SEC. 2. INFORMATION REGARDING SETTLEMENT AGREE2 MENTS ENTERED INTO BY FEDERAL AGEN3 CIES. 

4 (a) REQUIREMENTS FOR SETTLEMENT AGREE5 MENTS.— 

6 (1) IN GENERAL.—Chapter 3 of title 5, United 

7 States Code, is amended by adding at the end the 

8 following: 

9 ‘‘§ 307. Information regarding settlement agreements 

10 ‘‘(a) DEFINITIONS.—In this section— 

11 ‘‘(1) the term ‘covered settlement agreement’ 

12 means a settlement agreement (including a consent 

13 decree) that— 

14 ‘‘(A) is entered into by an Executive agen15 cy; 

16 ‘‘(B) relates to an alleged violation of Fed17 eral civil or criminal law; and 

18 ‘‘(C) requires the payment of a total of not 

19 less than $1,000,000 by 1 or more non-Federal 

20 persons; 

21 ‘‘(2) the term ‘entity within the Federal Gov22 ernment’ includes an officer or employee of the Fed23 eral Government acting in an official capacity; and 

24 ‘‘(3) the term ‘non-Federal person’ means a 

25 person that is not an entity within the Federal Gov26 ernment. 


srobinson on DSK5SPTVN1PROD with BILLS
3 

•S 1109 RS

1 ‘‘(b) INFORMATION TO BE POSTED ONLINE.— 

2 ‘‘(1) REQUIREMENT.— 

3 ‘‘(A) IN GENERAL.—Subject to subpara4 graph (B), the head of each Executive agency 

5 shall make publicly available in a searchable 

6 format in a prominent location on the Web site 

7 of the Executive agency— 

8 ‘‘(i) a list of each covered settlement 

9 agreement entered into by the Executive 

10 agency, which shall include, for each cov11 ered settlement agreement— 

12 ‘‘(I) the date on which the par13 ties entered into the covered settle14 ment agreement; 

15 ‘‘(II) the names of the parties 

16 that settled claims under the covered 

17 settlement agreement; 

18 ‘‘(III) a description of the claims 

19 each party settled under the covered 

20 settlement agreement; 

21 ‘‘(IV) the amount each party set22 tling a claim under the covered settle23 ment agreement is obligated to pay 

24 under the settlement agreement; 


srobinson on DSK5SPTVN1PROD with BILLS
4 

•S 1109 RS

1 ‘‘(V) the total amount the set2 tling parties are obligated to pay 

3 under the settlement agreement; and 

4 ‘‘(VI) for each settling party— 

5 ‘‘(aa) the amount, if any, 

6 the settling party is obligated to 

7 pay that is expressly specified 

8 under the covered settlement 

9 agreement as a civil or criminal 

10 penalty or fine; and 

11 ‘‘(bb) the amount, if any, 

12 that is expressly specified under 

13 the covered settlement agreement 

14 as not deductible for purposes of 

15 the Internal Revenue Code of 

16 1986; and 

17 ‘‘(ii) a copy of each covered settlement 

18 agreement entered into by the Executive 

19 agency. 

20 ‘‘(B) CONFIDENTIALITY PROVISIONS.—The 

21 requirement to disclose information or a copy of 

22 a covered settlement agreement under subpara23 graph (A) shall apply to the extent that the in24 formation or copy (or portion thereof) is not 

25 subject to a confidentiality provision that proVerDate Sep 11 2014 23:08 Jul 07, 2015 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1109.RS S1109

srobinson on DSK5SPTVN1PROD with BILLS
5 

•S 1109 RS

1 hibits disclosure of the information or copy (or 

2 portion thereof). 

3 ‘‘(2) PERIOD.—The head of each Executive 

4 agency shall ensure that— 

5 ‘‘(A) information regarding a covered set6 tlement agreement is publicly available on the 

7 list described in paragraph (1)(A)(i) for a pe8 riod of not less than 5 years, beginning on the 

9 date of the covered settlement agreement; and 

10 ‘‘(B) a copy of a covered settlement agree11 ment made available under paragraph (1)(A)(ii) 

12 is publicly available— 

13 ‘‘(i) for a period of not less than 1 

14 year, beginning on the date of the covered 

15 settlement agreement; or 

16 ‘‘(ii) for a covered settlement agree17 ment under which a non-Federal person is 

18 required to pay not less than $50,000,000, 

19 for a period of not less than 5 years, be20 ginning on the date of the covered settle21 ment agreement. 

22 ‘‘(c) PUBLIC STATEMENT.—If the head of an Execu23 tive agency determines that a confidentiality provision in 

24 a covered settlement agreement, or the sealing of a covered 

25 settlement agreement, is required to protect the public inVerDate Sep 11 2014 23:08 Jul 07, 2015 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1109.RS S1109

srobinson on DSK5SPTVN1PROD with BILLS
6 

•S 1109 RS

1 terest of the United States, the head of the Executive 

2 agency shall issue a public statement stating why such ac3 tion is required to protect the public interest of the United 

4 States, which shall explain— 

5 ‘‘(1) what interests confidentiality protects; and 

6 ‘‘(2) why the interests protected by confiden7 tiality outweigh the public’s interest in knowing 

8 about the conduct of the Federal Government and 

9 the expenditure of Federal resources. 

10 ‘‘(d) REQUIREMENTS FOR WRITTEN PUBLIC STATE11 MENTS.—Any written public statement issued by an Exec12 utive agency that refers to an amount to be paid by a 

13 non-Federal person under a covered settlement agreement 

14 shall— 

15 ‘‘(1) specify which portion, if any, of the 

16 amount to be paid under the covered settlement 

17 agreement by a non-Federal person— 

18 ‘‘(A) is expressly specified under the cov19 ered settlement agreement as a civil or criminal 

20 penalty or fine to be paid for a violation of Fed21 eral law; or 

22 ‘‘(B) is expressly specified under the cov23 ered settlement agreement as not deductible for 

24 purposes of the Internal Revenue Code of 1986; 


srobinson on DSK5SPTVN1PROD with BILLS
7 

•S 1109 RS

1 ‘‘(2) if no portion of the amount to be paid 

2 under the covered settlement agreement by a non3 Federal person is expressly specified under the cov4 ered settlement agreement as a civil or criminal pen5 alty or fine, include a statement specifying that is 

6 the case; and 

7 ‘‘(3) describe in detail— 

8 ‘‘(A) any actions the non-Federal person 

9 shall take under the covered settlement agree10 ment in lieu of payment to the Federal Govern11 ment or a State or local government; and 

12 ‘‘(B) any payments or compensation the 

13 non-Federal person shall make to other non14 Federal persons under the covered settlement 

15 agreement. 

16 ‘‘(e) CONFIDENTIALITY.—The requirement to dis17 close information under subsection (d) shall apply to the 

18 extent that the information to be disclosed (or portion 

19 thereof) is not subject to a confidentiality provision that 

20 prohibits disclosure of the information (or portion there21 of). 

22 ‘‘(f) REPORTING.— 

23 ‘‘(1) IN GENERAL.—Not later than January 15 

24 of each year, the head of an Executive agency that 

25 entered into a covered settlement agreement during 


srobinson on DSK5SPTVN1PROD with BILLS
8 

•S 1109 RS

1 the previous fiscal year shall submit to each com2 mittee of Congress with jurisdiction over the activi3 ties of the Executive agency a report indicating— 

4 ‘‘(A) how many covered settlement agree5 ments the Executive agency entered into during 

6 that fiscal year; 

7 ‘‘(B) how many covered settlement agree8 ments the Executive agency entered into during 

9 that fiscal year that had any terms or condi10 tions that are required to be kept confidential; 

11 and 

12 ‘‘(C) how many covered settlement agree13 ments the Executive agency entered into during 

14 that fiscal year for which all terms and condi15 tions are required to be kept confidential. 

16 ‘‘(2) AVAILABILITY OF REPORTS.—The head of 

17 an Executive agency that is required to submit a re18 port under paragraph (1) shall make the report pub19 licly available in a searchable format in a prominent 

20 location on the Web site of the Executive agency.’’. 

21 (2) TECHNICAL AND CONFORMING AMEND22 MENT.—The table of sections for chapter 3 of title 

23 5, United States Code, is amended by adding at the 

24 end the following: 

‘‘307. Information regarding settlement agreements.’’. 

25 (b) SECURITIES REPORTING.— 


srobinson on DSK5SPTVN1PROD with BILLS
9 

•S 1109 RS

1 (1) IN GENERAL.—Each issuer of securities 

2 that is required to file annual or other periodic re3 ports with the Commission under section 13 or 

4 15(d) of the Securities Exchange Act of 1934 (15 

5 U.S.C. 78m and 78o(d)) shall describe in such a re6 port any claim filed for a deduction under the Inter7 nal Revenue Code of 1986 during the reporting pe8 riod that relates to a payment required under a cov9 ered settlement agreement. 

10 (2) DEFINITIONS.—As used in this sub11 section— 

12 (A) the term ‘‘Commission’’ means the Se13 curities and Exchange Commission; 

14 (B) the term ‘‘covered settlement agree15 ment’’ has the meaning given that term in sec16 tion 307 of title 5, United States Code, as 

17 added by subsection (a); and 

18 (C) the term ‘‘issuer’’ has the same mean19 ing as in section 3 of the Securities Exchange 

20 Act of 1934 (15 U.S.C. 78c). 

21 (c) REVIEW OF CONFIDENTIALITY OF SETTLEMENT

22 AGREEMENTS.—Not later than 6 months after the date 

23 of enactment of this Act, the Comptroller General of the 

24 United States shall submit to Congress a report regarding 

25 how Executive agencies (as defined under section 105 of 


srobinson on DSK5SPTVN1PROD with BILLS
10 

•S 1109 RS

1 title 5, United States Code) determine whether the terms 

2 of a settlement agreement or the existence of a settlement 

3 agreement will be treated as confidential, which shall in4 clude recommendations, if any, for legislative or adminis5 trative action to increase the transparency of Government 

6 settlements while continuing to protect the legitimate in7 terests that confidentiality provisions serve. 


srobinson on DSK5SPTVN1PROD with BILLS

srobinson on DSK5SPTVN1PROD with BILLS
Calendar No. 140 

114TH CONGRESS 

1ST SESSION S. 1109 

[Report No. 114–76] 

A BILL 

To require adequate information regarding the tax 

other purposes. ments entered into by Federal agencies, and for treatment of payments under settlement agreeJULY 7, 2015 

Reported without amendment 


srobinson on DSK5SPTVN1PROD with BILLS